Shareholder wealth maximisation

Shareholder wealth reflects the value of expected future distributions and capital value, rather than just a single period's accounting profit. NPV links investment decisions to additional value after allowing for the required return. A wealth objective does not mean ignoring laws, ethics, employees, customers or environmental effects: these create duties and can influence long-run outcomes. Market prices provide information but may be volatile and affected by external factors. Distinguish sustainable value creation from manipulating short-term reported earnings or share price without improving underlying prospects.